Chapter 7, Problem 24E

(a)

To determine

To explain the mistakes in the statement made by the students of the economics.

Explanation of Solution

The statement made by the students is as: There was a very strong correlation of $1.22$ between Life expectancy and GDP.

By looking at the statement we can see that, it is given that the correlation is $1.22$ between life expectancy and GDP but the correlation is always between $-1\le r\le 1$ . This means that the given correlation is wrong and mistake done by the students.

(b)

To determine

To explain the mistakes in the statement made by the students of the economics.

Explanation of Solution

The statement made by the students is as: The correlation between Literacy rate and GDP was $0.83$ . This shows that the country wanting to increase their standard of living should invest heavily in education.

By looking at the statement we can see that, the correlation between Literacy Rate and GDP is not exactly one. Therefore, you cannot say that there is a direct relationship between education and standard of living. Also, there are other factors in increasing standard of living apart from the education too.